LG Vice Chairman Park Jin-soo.

LG Business Group’s 12 listed subsidiaries saw their total capitalization shoot up nearly 10 percent in September. The jump was owed primarily to a surge in share prices of LG Chem and LG Household and Health Care. In particular, entering October, LG Chem shares have hovered around 280,000 won apiece, up some 30 percent from early September. 

Korean securities companies predicted that LG Chem would chalk up an estimated 506 billion won in operating profit for the third quarter of the year, ranking 1st for the second straight quarter among LG subsidiaries. LG Display is forecast to place second with an estimated 371 billion won in operating profit, followed by LG Electronics with an estimated 265 billion won. Business analysts said LG Chem is emerging as a mainstay company, replacing LG Electronics, which is suffering a setback from the sagging sales of smartphones. On the other hand, LG Chem is making great business advances in such business areas as vehicle batteries, with a higher profit ratio. 

LG Chem is making a jump-start in the acrylonitrile-butadiene-styrene (ABS) resin, mid- and large-sized lithium-ion battery and TFT-LCD polarization plate sectors with a globally competitive edge. The company ranks 1st in the world with the biggest market share in the ABS resin market, with a production capacity of 1.65 million tons. LG Chem, which overtook front-runner Nitto Denko in the fourth quarter of 2008, maintains the No. 1 position. The company, which launched the mid- and large-sized battery business in 2000, now ranks 1st in the market for batteries for electric vehicles and electricity storage systems.

An aerial view of LG Chem’s Yeosu plant.(Photos:LG Chem)

LG Chem Aims to be Global No. 1 Material Company

LG Chem is now stepping on the gas when it comes R&D. The company plans to pour some 1.79 trillion won into expanding capacity of super absorbent polymer (SAP) and electric vehicle battery plants.

LG Chem’s fourth super absorbent polymer (SAP) plant in the Yonseong district of the Yeosu National Industrial Complex is under construction. The company plans to raise its annual SAP production capacity from the current 280,000 tons to 360,000 tons this year. 

“SAP requires an advanced technology, so it has emerged as a strategic material to make a difference between our company and Chinese competitors,” said Song Hee-yoon, head of LG Chem chemical products plant. He went on to say that LG Chem saw its production capacity surge five-fold since the company entered the SAP business in 2008. SAP is a polymer material that can absorb pure water up to several hundred times its own weight.

Despite the sagging chemical industry, LG Chem plans to expand investments into new materials for new growth engines.

In a recent meeting with reporters, LG Chem Vice Chairman Park Jin-soo unveiled a blueprint to create inorganic materials, innovative batteries and future materials that have not yet hit the global market, with the goal of raising revenues in those segments to 1 trillion won by 2020.

To this end, he said LG Chem plans to expand R&D outlays from 600 billion won this year to 900 billion won by 2018, and raise the number of researchers from 3,100 to 4,100.

Research manpower specializing in future materials will work at LG Chem’s research center in Gwacheon, Gyeonggi-do, and LG Science Park LG Group plans to construct it in the Magok District in Seoul. It will be utilized to research new materials.

Vice Chairman Park said LG Chem, which started out with nothing at the Yeosu plant 40 years ago, has now evolved into a business with an 1,800-fold production increase since then, and the Yeosu plant will create a new chapter in LG Chem’s history. He said LG Chem will continue to invest into the materials sector until people recall LG Chem is No. 1 when it comes to materials that make human lives richer.

LG Chem aims to raise sales in the overall materials field, including basic material segments such as Sap and engineering plastics, information electronics like OLED lighting and energy storage systems to 12 trillion won by 2018. The company targets at 2 trillion won in sales in 2015, a two-fold increase form 2014.

LG Chem Petrochemical’s business unit has eight domestic and 26 overseas plants, including a plant in Gimcheon and a newly established Yeosu SAP facility.